Qualcomm Inc. showed surprising growth in its latest quarter, but lowered its sales targets to reflect shifting fortunes among smartphone makers and stiffer competition in China.

The San Diego-based chip maker benefited in its fiscal first quarter from sales of wireless modem chips used by Apple Inc., which on Monday said it sold a whopping 74.5 million handsets in the same period. Qualcomm, which has been grappling with an antitrust investigation in China, said it settled a dispute with a Chinese hardware company that had...